Part A: Introduction

The report examines how international trade policy can be leveraged to support climate action within the existing World Trade Organization (WTO) legal framework. It situates trade as both a contributor to greenhouse gas emissions and a potential instrument for mitigation. The analysis focuses on WTO rules rather than regional trade agreements, emphasising development considerations and the risks of unilateral action.

Part B: The “Liberalizing” role of trade

This section assesses how trade liberalisation can facilitate climate action by reducing barriers to environmental goods and services. Lower tariffs and non-tariff barriers can support the diffusion of clean technologies and environmentally preferable products. However, progress has been slow due to disagreements over product classification and concerns that liberalisation may disproportionately benefit developed economies. Evidence suggests developing countries may face adjustment risks if liberalisation favours products where they lack comparative advantage, highlighting the need for calibrated approaches.

Part C: The “Weighing and Balancing” regulatory role of trade

The report analyses regulatory trade measures used for climate objectives, including border carbon adjustments (BCAs), technical regulations, standards, and labelling. WTO law permits such measures provided they comply with core principles of non-discrimination and are not more trade-restrictive than necessary. The report highlights significant legal complexity around determining “like products”, process and production methods, and equivalence of different climate policies. Poorly designed measures risk arbitrary discrimination, green protectionism, and disproportionate impacts on low-income and least developed countries. Flexibility, transparency, and development-based preferences are identified as critical to lawful and credible design.

Part D: The “Supportive” role of trade

This section focuses on how trade policy can support green growth, industrial transformation, and access to climate technologies. Subsidies and industrial policy are increasingly used to promote renewable energy, clean manufacturing, and strategic green sectors. However, tensions with existing WTO subsidy disciplines persist. The report argues for clearer treatment of “green subsidies” and time-bound industrial policies to reduce legal uncertainty. It also highlights flexibilities in intellectual property rules, including compulsory licensing, as potential tools to improve access to climate technologies, stressing that technical assistance and capacity building are essential complements.

Part E: Looking ahead

The report identifies multilateral and plurilateral pathways to better align trade and climate governance. It underscores the importance of institutional cooperation between the WTO and bodies such as the G20, OECD, and UNCTAD. The G20 is highlighted as particularly influential, representing around 80% of global greenhouse gas emissions. While initiatives such as the Agreement on Climate Change, Trade and Sustainability demonstrate progress, the report cautions that plurilateral efforts cannot substitute for comprehensive multilateral reform.

Conclusions

The report concludes that WTO rules and institutions can play a central role in advancing climate action, including through BCAs, standards, subsidies reform, and technology access. Achieving this will require legal clarification, strengthened institutional cooperation, revived dispute settlement, and sustained political will. Without coordinated reform, reliance on unilateral measures risks fragmenting trade governance and undermining trust in the multilateral system.